Case study

BRAC Bank Limited is an affiliate of BRAC (formerly the Bangladesh Rural Advancement Committee), one of the world’s largest non-governmental development organisations founded by Fazle Abed in 1972. While BRAC specialises in microfinance, health and education services for communities in extreme poverty, BRAC Bank was established in 2001 primarily to provide loan and general banking facilities to small-to-medium-sized enterprises (SMEs) in Bangladesh. This sector, comprising businesses such as grocers, corner shops, clothes retailers and some small manufacturers, had traditionally been under-served by the established banking community. BRAC Bank is now the fastest growing bank in Bangladesh in both deposits and credit, making average SME loans of US$6,500, and also offering loans and credit cards to consumers. It has around 400 regionally-placed loan processing units offering services in the heart of rural and urban communities and employs over 700 business loan officers – around 60% of total staff.

• Four-fold growth in size and earnings in three years.
• Loans outstanding grew by 87% during 2005 and total deposits increased by 51% to US$200m.
• SME lending of US$81.7m to nearly 15,000 SME customers in 2005.
• Growing retail market presence with 125,000 account holders and 60,000 cash cards in circulation.
• The bank now has a total of 1,213 full-time staff (475 in 2003).
• BRAC Bank customer surveys reveal that an estimated 18,000 new jobs have been created thanks to SME loans helping business expansion.
• BRAC Bank's SME focus has proved so successful that many of the larger commercial banks are now competing for customers in this sector.
• The bank is planning to open another 12 branches in 2006, bringing its total to 30 while adding another 300 small business loan officers.